Circular No. 80/54 /2018-GST

F. No.354/432/2018-TRU

Government of India

Ministry of Finance

Department of Revenue

(Tax Research Unit)

*****

North Block, New Delhi

Dated 31st December, 2018

To,

Principal Chief Commissioners/ Principal Directors General,

Chief Commissioners/ Directors General,

Principal Commissioners/ Commissioners of Central Excise & Central Tax

Madam/ Sir,

Subject: Clarification regarding GST rates & classification (goods)–reg.

Representations have been received seeking clarification in respect of

applicable GST rates on the following items:

(i) Chhatua or Sattu

(ii) Fish meal and other raw materials used for making cattle/poultry/aquatic

feed

(iii) Animal Feed Supplements/ feed additives from drugs

(iv) Liquefied Petroleum Gas for Domestic Use

(v) Polypropylene Woven and Non-Woven Bags and PP Woven and Non-

Woven Bags laminated with BOPP

(vi) Wood logs for pulping

(vii) Bagasse based laminated particle board

(viii) Embroidered fabric sold in three pieces cloth for lady suits

(ix) Waste to Energy Plant-scope of entry No. 234 of Schedule I of notification

No.1/2017- Central Tax (Rate) dated 28.6.2017

(x) Turbo Charger for railways

(xi) Rigs, tools & Spares moving inter-state for provision of service

2. The matter has been examined. The issue-wise clarifications are discussed

below:

3. Applicability of GST on Chhatua or Sattu:

3.1 Doubts have been raised regarding applicability of GST on Chhatua

(Known as “Sattu” in Hindi Belt).

3.2 Chhatua or Sattu is a mixture of flour of ground pulses and cereals. HSN

code 1106 includes the flour, meal and powder made from peas, beans or lentils

(dried leguminous vegetables falling under 0713). Such flour improved by the

addition of very small amounts of additives continues to be classified under HSN

code 1106. If unbranded, it attracts Nil GST (S. No. 78 of notification No. 2/2017-

Central Tax (Rate) dated 28.06.2017) and if branded and packed it attracts 5% GST

(S. No. 59 of schedule I of notification No. 1/2017-Central Taxes (Rate) dated

28.06.2017).

4. Applicable GST rate on Fish meal and other raw materials used for

making cattle/poultry/aquatic feed:

4.1. Representations have been received seeking clarification regarding GST rate

applicable on the other raw materials/inputs used for making

cattle/poultry/aquatic feed. The classification dispute here is between the

following two entries in the two notifications. The details are as under:

Notification Tariff

Line

Description Rate

S. No. 102 of

notification No.

2/2017- Central

Tax (Rate) dated

28.6.2017

2301,

2302,

2308,

2309

Aquatic feed including shrimp feed and

prawn feed, poultry feed & cattle feed,

including grass, hay & straw,

supplement & husk of pulses,

concentrates & additives, wheat bran &

de-oiled cake

NIL

S. No. 103 of

notification No.

1/2017- Central

Tax (Rate) dated

28.6.2017

2301 Flours, meals and pellets, of meat or

meat offal, of fish or of crustaceans,

molluscs or other aquatic invertebrates,

unfit for human consumption; greaves

5%

4.2 A number of raw materials such as fish meal falling under heading 2301,

meat and bone meal also falling under heading 2301, oil cakes of various oil seeds,

soya seeds, bran, sharps, residue of starch and all other goods falling under

headings 2302, 2303, 2304, etc are used to manufacture/formulation of, aquatic

feed, animal feed, cattle feed, poultry feed etc. These raw materials/inputs cannot

be directly used for feeding animal and cattle. The Larger Bench of the Hon’ble

Supreme Court in the Commissioner of Customs (Import), Mumbai vs. Dilip

Kumar [2018 (361) E.L.T 577] has laid down that inputs for animal feed are

different from the animal feed. Said S. No. 102 covers the prepared aquatic/

poultry/cattle feed falling under headings 2309 and 2301. This entry does not apply

to raw material/inputs like fish meals or meat cum bone meal (MBM) falling under

heading 2301.

4.3 It is accordingly clarified that fish meals, meat cum bone meal (MBM) etc.,

attract 5% GST under S. No. 103 in notification No. 1/2017- Central Tax (Rate)

dated 28.6.2017

5. Applicable GST rate on Animal Feed Supplements/feed additives from

drugs:

5.1. Representations have been received seeking clarification regarding GST rate

applicable on Animal Feed Supplements/feed additives from drugs. The dispute

is in classification of Animal Feed Supplements/feed additives from drugs

between tariff heading 2309 and 2936.

5.2 As per the HSN, 2309 interalia covers reading vitamins and provitamins

which improve digestion and, more generally, ensure that the animal makes good

use of the feeds and safeguard its health. On the other hand, HS code 2936 coves

vitamins and provitamins which are medicinal in nature and have much higher

concentration of active substance.

5.4 Thus while deciding the classification of the products claimed to be animal

feed supplements, it may be necessary to ensure that the said animal feed

supplements are ordinarily or commonly known to the trade as products for a

specific use in animal feeding.

5.5 A product deserves classification chapter 29 ( equally applicable to heading

2936), if it is an item of general use, e.g., if a product is of specific use, say dietary

supplement for human being product particularly suitable for a specific use rather

than for general use. Vitamins and provitamins are normally covered under code

heading 2936, but if they’re prepared as food supplements in the form of tablets,

etc. they would not be classifiable under this heading as the way they are

presented, they are suitable for a specific use. Heading 2309 would cover items

like feed supplements for animals that contain vitamins and other ingredients -

such as cereals and proteins. These are covered in chapter 23 under heading code

2309, or antibiotic preparations used in animal feeding - for example a dried

antibiotic mass on a carrier like cereal middling. The antibiotic content in these

items is usually between 8% and 16%. Thus, HS code 2309 would cover only such

product, which in the form supplied, are capable of specific use as food

supplement for animals and not capable of any general use. If the vitamins,

provitamins are supplied in a form in which they are capable of general use, i.e. in

the form in which it could be used as inputs or raw materials for further

processing, instead of being ready to use, then these would be classifiable under

heading 2936.

6. Applicability of GST on supply of Liquefied Petroleum Gas for Domestic

Use:

6.1 Representations have been received seeking clarification regarding

applicability of GST rate at 5% on LPG supplied by refiners/fractionators (like

GAIL / ONGC) to Oil Marketing Companies (OMC) for ultimate supply to

household domestic consumers in terms of Ministry of Petroleum and Natural Gas

(MoPNG) letter No. P 20023/2/2011-PP dated 23.07.2013. The references point to

the fact that refiners/ fractionators like GAIL and ONGC are supplying LPG for

domestic use to OMCs and this supply is not being treated as a supply for domestic

use by field formations.

6.2 The issue seems to have arisen in the context of addition of S. No. 165A to

notification No.1/2017-Central Tax (Rate) dated 28.6.2017, vide notification No.

6/2018 dated 25.01.2018. This entry was added on the recommendations of the GST

Council in its 25th meeting, extending 5% GST rate for supply of LPG to household

domestic consumers.

6.3 It is observed that the LPG stream for domestic LPG is differentially priced

and packed differently from commercial LPG. The usage of LPG for domestic

supply is known at the time of supply being made by refiner/fractionators to

OMCs.

6.4 Therefore, it is being clarified that LPG supplied in bulk, whether by a

refiner/fractionator to an OMC or by one OMC to another for bottling and further

supply for domestic use will fall under the S. No. 165A of the notification No.

1/2017- Central Tax (Rate) dated 28.06.2017 and shall, accordingly, attract a GST

rate of 5%, with effect from 25.1.2018.

7. Applicability of GST on supply of Polypropylene Woven and Non-

Woven Bags and PP Woven and Non-Woven Bags laminated with BOPP:

7.1 Representations have been received seeking the classification and GST rates

on Polypropylene Woven and Non-Woven Bags and Polypropylene Woven and

Non-Woven Bags laminated with BOPP

7.2 As per the explanatory notes to the HSN to HS code 39.23, the heading

covers all articles of plastics commonly used for the packing or conveyance of all

kinds of products and includes boxes, crates, cases, sacks and bags.

7.3 Further as per the Chapter note to Chapter 39, the expression "plastics"

means those materials of headings 39.01 to 39.14 which are or have been capable,

either at the moment of polymerization or at some subsequent stage, of being

formed under external influence (usually heat and pressure, if necessary with a

solvent or plasticizer) by moulding, casting, extruding, rolling or other process

into shapes which are retained on the removal of the external influence.

7.4 Thus it is clarified that Polypropylene Woven and Non-Woven Bags and PP

Woven and Non-Woven Bags laminated with BOPP would be classified as plastic

bags under HS code 3923 and would attract 18% GST.

7.5 Non-laminated woven bags would be classified as per their constituting

materials.

8. Applicability of GST on supply of wood logs for pulping:

8.1. Representation has been received seeking clarification on applicability of

GST rate on wood log for pulping. Wood in the rough (whether or not stripped of

bark or sapwood, or roughly squared) is classified under heading 4403 and attracts

18% GST.

8.2 As per HSN, heading 4403 also covers.

“timber for sawing; poles for telephone, telegraph or electrical power transmission

lines; unpointed and unsplit piles, pickets, stakes, poles and props; round pit-props;

logs, whether or not quarter-split, for pulping; round logs for the manufacture

of veneer sheets, etc.; logs for the manufacture of match sticks, wood ware, etc.”.

8.3 Thus, it is clarified that wood logs or any kind of wood in the rough/timber,

including the wood in rough/log/timber used for pulping falls under heading 4403

and attract GST at the rate of 18%.

9. Applicability of GST on supply of Bagasse based laminated particle

board:

9.1 Representation has been received seeking clarification on applicability of

GST rate on Bagasse based laminated particle board. In this context, it is sated that

the Bagasse Board has specific entry at S. No. 92 in Schedule II to the Notification

1/2017-Central Tax (Rate). Accordingly, the said entry covers Bagasse boards

falling under 44 or any other chapter and 12% GST. Further, it is also stated the

description “Bagasse board” in the said entry also covers Bagasse board [ whether

plain or laminated].

9.2 Thus, it is clarified Bagasse board [whether plain or laminated] falling under

chapter 44 will attract concessional GST rate of 12%.

10. Applicability of GST on supply of embroidered fabric sold in three piece

for lady suits:

10.1. Representations have been received seeking clarification regarding GST rate

applicable on supply of embroidered fabric sold in three pieces fabric pack/set for

lady suits (fabric for suit, salwar and dupatta). It has been informed that before

becoming readymade articles or an apparel, the fabric is cut from bundles or thans

and sold in that unstitched state with certain embellishment like gota etc. The

consumers buy these sets or pieces and get it tailored which entails cutting of fabric

in shape and stitching thereof. Doubts have arisen as regards applicable rates on

such three fabric pieces in sets/packs.

10.2 Fabrics are classifiable under chapters 50 to 55 and 60 of the First Schedule

to the Customs Tariff Act, 1975 on the basis of their constituent materials and

attract a uniform GST rate of 5%. Garments and made up articles of textiles under

chapters 61, 62 and 63 attract GST at the rate of 5% when value is upto Rs 1000 per

piece and 12% when the value exceeds Rs. 1000 per piece.

10.3 Earlier, vide Circular no. 13/13/2017-CGST dated 27th October 2017, it has

been clarified that mere packing of fabrics into pieces of different lengths will not

change the nature of these goods and such pieces of fabrics would continue to be

classifiable under the respective heading as the fabric and attract the 5% GST rate.

This clarification would equally apply to three pieces of fabrics sold in a pack as

ladies salwar suit. Any embroidery on a fabric piece or certain embellishment

thereon does not change the basic nature of their being a fabric. The chapter 63

covers garment, including the unstitched garments which may or may not be

sufficiently completed to be identifiable as garments or parts of garments.

However, heading 6307 would not cover a fabric pieces or a set of pre-packed

fabric pieces, even if embroidered or embellished. Such set of fabric pieces would

attract GST at the rate of 5%.

11. Applicability of GST on supply of Waste to Energy Plant:

11.1. Representations have been received regarding applicable GST rate on the

goods used in the setting up of Waste to Energy plants (WTEP) in term of Sr. No.

234 of Schedule I of Notification No 1/2017-Central Tax (Rates) dated 28th June,

2018. The said entry 234 prescribes 5% rate on the following renewable energy

devices & parts for their manufacture:

(a) Bio-gas plant

(b) Solar power based devices

(c) Solar power generating system

(d) Wind mills, Wind Operated Electricity Generator (WOEG)

(e) Waste to energy plants / devices

(f) Solar lantern / solar lamp

(g) Ocean waves/tidal waves energy devices/plant

(h) Photo voltaic cells, whether or not assembled in modules or made up into

panels

11.2 The notification specifically applies only the goods falling under chapters

84, 85 and 94 of the Tariff. Therefore, this concession would be available only to

such machinery, equipment etc., which fall under Chapter 84, 85 and 94 and used

in the initial setting up of renewable energy plants and devices including WTEP.

This entry does not cover goods falling under other chapters, say a transport

vehicle falling under Chapter 87 that may be used for movement of waste to

WTEP.

11.3 Another related doubt raised is as to how would a supplier satisfy himself

that goods falling under Chapter 84, 85 and 94, say a turbine or a boiler, required

in a WTEP, would be used in the WTEP. In this context it is clarified that GST is to

be self-assessed by a taxpayer. Therefore, he needs to satisfy himself with the

requisite document from a buyer such as supply contracts/order for WTEP from

the concerned authorities before supplying goods claiming concession under said

entry 234.

12. Applicability of GST on supply of Turbo Charger for railways:

12.1. Representations have been received seeking clarification regarding

classification and applicable GST rate on Turbo Chargers supplied to railways. It

is stated that some of the supplier are classifying turbo charges supplied to

Railways under Chapter 86 and paying GST at the rate of 5%

12.2 The turbocharger is a turbine-driven forced induction device that increases

an internal combustion engine's efficiency and power output by forcing extra

compressed air into the combustion chamber. It has the compressor powered by a

turbine. The turbine is driven by the exhaust gas from the engine.

12.3 Turbo charger is specifically classified under chapter HS code 8414 80 30. It

continues to remain classified under this code irrespective of its use by Railways.

Therefore, it is clarified that the turbo charger is classified under heading 8414 and

attracts 18% GST.

13. Applicability of GST on supply of cranes, rigs, tools & Spares and other

machinery when moved from one state to another by a person on his account for

there use for supply of service

13.1 As per Circular No. 21/21/2017-GST dated 22.11.2017, it was clarified that no

IGST would be applicable on such interstate movements of rigs, tools & spares and

all goods on wheels. Doubts have been raised regarding applicability of GST on

inter-state movement of machinery like tower cranes, rigs, batching plants,

concrete pumps and mixers which are not mounted on wheels, but require regular

means of conveyance (used by companies in Infrastructure business).

13.2 Any inter-state movement of goods for provision of service on own

account by a service provider, where no transfer of title in such goods or transfer

of goods to the distinct person by way of stock transfer is not involved, does not

constitute a supply of such goods. Hence, it is clarified that any such movement

on own account (not involving distinct person in terms of section 25), where such

movement is not intended for further supply of such goods does not constitute a

supply and would not be liable to GST.

14. Difficulty, if any, may be brought to the notice of the Board immediately.

Hindi version shall follow.

Yours faithfully,

(Mahipal Singh)

Technical Officer (TRU-1)

mahipal.singh1980@gov.in

Circular No. 81/55/2018-GST

F.No.354/408/2018-TRU

Government of India

Ministry of Finance

Department of Revenue

(Tax Research Unit)

*****

North Block, New Delhi

Dated, 31st December, 2018

To,

Principal Chief Commissioners/ Principal Directors General,

Chief Commissioners/ Directors General,

Principal Commissioners/ Commissioners of GST and Central Tax (All),

Madam/ Sir,

Subject: Clarification regarding GST tax rate for Sprinkler and Drip Irrigation

System including laterals–reg.

Representations have been received seeking clarification as regards the scope and coverage of

entry No. 195B of the Schedule II to notification No. 1/2017- Central Tax (Rate), dated

28.06.207. The entry No. 195B was inserted vide notification No. 6/2018- Central Tax

(Rate), dated 25th January, 2018 and reads as below:

S. No Chapter

Heading/ Sub-

heading/Tariff

Item

Description of Goods CGST

rate

195B 8424 Sprinklers; drip irrigation system including laterals; 6%

2. Doubts have arisen as in certain cases a view has been taken in the field that this entry

would not cover “laterals of sprinklers” and “sprinklers irrigation system”, while laterals of

drip irrigations are covered by this entry.

3. The matter has been examined. Initially, with effect from 1.7.2017, all goods falling

under HS 8424, namely, Mechanical appliances (whether or not hand-operated) for

projecting, dispersing or spraying liquids or powders; spray guns and similar appliances;

steam or sand blasting machines and similar jet projecting machines (other than fire

extinguishers, whether or not charged), were placed under 18% slab. Subsequently, on the

recommendation of the GST Council, the item namely, ‘Nozzles for drip irrigation equipment

or nozzles for sprinkler was placed under 12% GST slab (Entry No. ‘195A’ with effect from

22.09.2017). Upon revisiting the issue of GST rate on micro irrigation including drip

irrigation system, including laterals the GST Council recommended 12% GST rate on micro

irrigation system, namely, sprinklers, drip irrigation system, including laterals. Accordingly,

the said entry 195B was inserted in the notification No. 1/2017- Central Tax (Rate).

3.1 The micro irrigation, sometimes called „localised irrigation‟, „low volume irrigation‟,

or „trickle irrigation‟ is a system where water is distributed under low pressure through piped

network, in a pre-determined pattern, and applied as a small discharge to each plant or

adjacent to it. The traditional drip irrigation using individual emmitters, subsurfaces drip

irrigations (SDI), micro-spray or micro-sprinkler irrigation, and mini bubbler irrigation all

belong to the catgeory of micro irrigation method.

4. Therefore, the term “sprinklers”, in the said entry 195B, covers sprinkler irrigation

system. Accordingly, sprinkler system consisting of nozzles, lateral and other components

would attract 12% GST rate.

5. Difficulty, if any, may be brought to the notice of the Board immediately. Hindi

version shall follow.

Yours faithfully

Gunjan Kumar Verma

Under Secretary (TRU-I)

Circular No. 84/03/2019-GST

1

F. No. 354/428/2018-TRU

Government of India

Ministry of Finance

Department of Revenue

Tax research Unit

****

Room No. 146G, North Block,

New Delhi, the 1th January 2019

To,

The Principal Chief Commissioners/ Chief Commissioners/ Principal

Commissioners/ Commissioner of Central Tax (All) /

The Principal Director Generals/ Director Generals (All)

Madam/Sir,

Subject: Clarification on issue of classification of service of printing of pictures

covered under 998386– reg.

It has been brought to the notice of the Board that the service of “printing of

pictures” correctly covered under service code 998386 - “Photographic and videographic

processing services” is being classified by trade under service code 998912 - “Printing

and reproduction services of recorded media, on a fee or contract basis”. The two service

codes attract different GST rate of 18% and 12% respectively and therefore wrong

classification may lead to short payment of GST.

2. The matter has been examined. According to Explanatory Notes to the scheme of

classification of services, the service code “998386 Photographic and videographic

processing services, includes, -

developing of negatives and the printing of pictures for others according to

customer specifications such as enlargement of negatives or slides, black and white

processing; colour printing of images from film or digital media; slide and negative

duplicates, reprints, etc.; developing of film for both amateur photographers and

commercial clients; preparing of photographic slides; copying of films; converting of

photographs and films to other media”

3. Further, according to explanatory notes, the service code 998912 “Printing and

reproduction services of recorded media, on a fee or contract basis” clearly excludes, -

-colour printing of images from film or digital media, cf. 998386,

-audio and video production services, cf. 999613”

4. In view of the above, it is clarified that service of “printing of pictures” falls under

service code “998386: Photographic and videographic processing services” and not

Circular No. 84/03/2019-GST

2

under “998912: Printing and reproduction services of recorded media, on a fee or

contract basis” of the scheme of classification of service annexed to notification No.

11/2017-Central Tax(Rate) dated 28.06.2018. The service of printing of pictures attracts

GST @ 18% falling under item (ii), against serial number 21 of the Table in notification

No. 11/2017-Central Tax(Rate) dated 28.06.2018.

5. Difficulty if any, in the implementation of this circular may be brought to the notice

of the Board.

Yours Faithfully,

Harsh Singh

Technical Officer (TRU)

Email: harshsingh.irs@gov.in

Circular No. 85/04/2019- GST

1

F. No. 354/428/2018-TRU

Government of India

Ministry of Finance

Department of Revenue

Tax research Unit

****

Room No. 156, North Block,

New Delhi, the 1st January, 2019

To,

The Principal Chief Commissioners/ Chief Commissioners/ Principal

Commissioners/ Commissioner of Central Tax (All) /

The Principal Director Generals/ Director Generals (All)

Madam/Sir,

Subject: Clarification on GST rate applicable on supply of food and beverage services

by educational institution- reg.

Representations have been received seeking clarification as to the rate of GST

applicable on supply of food and beverages services by educational institution to its students.

It has been stated that the words “school, college” appearing in Explanation 1 to Entry 7 (i)

of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 give rise to doubt whether

supply of food and drinks by an educational institution to its students is eligible for exemption

under Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 Sl. No 66, which

exempts services provided by an educational institution to its students, faculty and staff.

2. The matter has been examined. Notification No. 11/2017-Central Tax (Rate) dated

28.06.2017, Sl. No. 7(i) prescribes GST rate of 5% on supply of food and beverages services.

Explanation 1 to the said entry states that such supply can take place at canteen, mess,

cafeteria of an institution such as school, college, hospitals etc. On the other hand,

Notification No. 12/2017-Central Tax (Rate), Sl. No. 66 (a) exempts services provided by an

educational institution to its students, faculty and staff. There is no conflict between the two

entries. Entries in Notification No. 11/2017-Central Tax (Rate) prescribing GST rates on

service have to be read together with entries in exemption Notification No. 12/2017-Central

Tax (Rate) dated 28.06.2017. A supply which is specifically covered by any entry of

Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 is exempt from GST

notwithstanding the fact that GST rate has been prescribed for the same under Notification

No. 11/2017-Central Tax (Rate) dated 28.06.2017.

Circular No. 85/04/2019- GST

2

2.1 Supply of all services by an educational institution to its students, faculty and staff is

exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, Sl. No. 66.

Such services include supply of food and beverages by an educational institution to its

students, faculty and staff. As stated in explanation 3 (ii) to Notification No. 12/2017-Central

Tax (Rate) dated 28.06.2017 Chapter, Section, Heading, Group or Service Codes mentioned

in column (2) of the table in Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017

are only indicative. A supply is eligible for exemption under an entry of the said notification

where the description given in column (3) of the table leaves no room for any doubt.

Accordingly, it is clarified that supply of food and beverages by an educational institution to

its students, faculty and staff, where such supply is made by the educational institution itself,

is exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, vide Sl. No.

66 w.e.f. 01-07-2017 itself. However, such supply of food and beverages by any person other

than the educational institutions based on a contractual arrangement with such institution is

leviable to GST@ 5%.

3. In order to remove any doubts on the issue, Explanation 1 to Entry 7(i) of Notification

No. 11/2017-Central Tax (Rate) dated 28.06.2017 has been amended vide Notification No.

27/2018-Central Tax (Rate) dated 31.12.2018 to omit from it the words “school, college”.

Further, heading 9963 has been added in Column (2) against entry at Sl. No. 66 of Notification

No. 12/2017-Central Tax (Rate) dated 28.06.2017, vide Notification No. 28/2018-Central Tax

(Rate) dated 31.12.2018.

4. Difficulty, if any, in implementation of this Circular may be brought to the notice of

the Board.

Yours Faithfully,

(Harish Y N)

Technical Officer, TRU

Email: harish.yn@gov.in

Tel: 011 2309 5547